There’s been an interesting debate within the Catallaxy collective concerning inheritance taxes, affirmative action and related topics. Without covering all of the issues let me make a couple of observations. First, as David Friedman observes, efficiency arguments are based on the presumption that, if we always choose the policy that maximises aggregate dollar benefits, gains and losses to individuals will cancel out over time, leaving everyone better off than under any plausible alternative rule. This argument clearly doesn’t apply if much of one’s life chances are inherited or otherwise determined at birth. So, to my mind, efficiency arguments against inheritance taxes are doomed from the start.
Second, this debate raises questions about the idea, popular in Third Way circles, that we can forget about equality of outcomes and focus on equality of opporunity. Given highly unequal outcomes in one generation, the successful members of that generation will find ways to give their children a headstart. Hence, equality of opportunity can’t coexist with ‘too much” inequality of outcomes.